Global oil prices rose on Friday for the fifth straight session, hitting a week high and on track for a weekly profit amid growing concerns about Middle East tensions.

Prices are also boosted by expectations of slower growth in US crude production this year, overshadowing data that showed a large US crude inventory buildup last week. 

Crude Prices

US crude rose 0.45% to $76.72 a barrel, a week high, while Brent added 0.4% to $81.95 a barrel, also a week high.

US crude rallied 3.25% on Thursday, while Brent added 3.1%, the fourth profit in a row. 

Weekly Trades 

Global oil prices are up 5.5% so far this week on track for the third weekly profit in the last month.

Middle East Tensions 

Israel Prime Minister Benjamin Netanyahu refused a potential ceasefire in the war with Gaza, leading to more tensions in the Middle East. 

Otherwise, the US forces killed an important leader for an Iran-backed militia by a drone in Baghdad in response to recent attacks on US forces. 

The US continues to target sites in Iraq and Syria used by Iranian forces and their allies. 

US Production 

The Energy Information Administration now officially expects that US production won’t surpass the record high of 13.3 million bpd touched in December 2023 until February 2025. 

The EIA cut its forecasts for local oil production growth in 2024 to just 170 thousand bpd, compared to 1.02 million bpd in 2023.

US Stocks

The Energy Information Administration reported a buildup of 5.5 million barrels in US crude stocks last week to a total of 427.4 million barrels, while analysts only expected a buildup of 1.7 million barrels.

Gasoline stocks fell 3.1 million barrels to 251 million barrels, while distillate stocks tumbled by 3.2 million barrels to 127.6 million barrels. 

Silver prices rose in European trade on Friday, extending gains for the second day off two-week lows amid short-covering.

Demand is expected to improve on precious metals amid the New Lunar Year holiday, while Chinese authorities take new measures this week to boost the economy and underpin demand. 

Silver Prices Today

Silver prices rose 0.6% to $22.72 an ounce, after rising 1.65% on Thursday, the second profit in three days away from a two-week trough at $22.15. 

Chinese Demand 

The new lunar year in China starts tomorrow, February 10, and continues for 15 days, and is expected to be a year filled with “positive energy” according to Chinese astrology. 

During the festivals, demand usually spikes on jewelry of all kinds, with people exchanging gifts and wearing new jewelry items as part of the traditions. 

It’s now expected that the new year in China will witness one of the biggest spikes on precious metals and jewelry so far. 

Additionally, Chinese authorities starting taking new stimulus measures to boost economic activities in the country, which is expected to boost demand on industrial metals as well.

Silver Institute 

The Washington-based Silver Institute said in its latest report that 2024 will be a “fantastic year” for the white metal, with prices potentially rising to 10-year highs.

The institute expects silver demand to hit 1.2 billion ounces in 2024, the second highest on record. 

The non-profit organization said that strong industrial activities will drive demand on silver, as manufacturing scales up worldwide this year. 

Gold prices fell in European trade on Friday, extending losses for the third straight session under pressure from higher US treasury yields, and following bullish remarks from Fed officials.

Strong US data and remarks from Fed officials hurt the odds of a US interest rate cut in March and May. 

Gold Prices Today

Gold prices fell 0.2% to $2,030 an ounce, with a session-high at $2,035, after losing 0.1% yesterday, the second loss in a row as the dollar gained ground.

US Yields 

US 10-year treasury yields rose by over 0.4% on Friday, extending gains for the third straight session and almost hitting multi-week highs, hurting non-yielding assets. 

Yields added 15 basis points this week as investors changed the prospects of upcoming US rate cuts following recent strong data and bullish remarks by Fed officials.  

US Economic Flexibility 

Recent US data showed unemployment claims fell more than expected in yet another sign of strength and resilience by the US economy. 

US Remarks 

Several US Fed officials dismissed the need for early US rate cuts and policy easing this year in light of recent data.

Richmond Fed President Thomas Parkin said that Fed policymakers have ample time to decide on US rate cuts.

Minneapolis Fed President Neil Kashkarei said the Fed has time to study recent data before deciding on rate cuts and policy easing.   

Chicago Fed President Austan Goolsbey said he’s like to see more positive inflation data before deciding on rate cuts. 

 US Rates

The odds of a 0.25% interest rate cut in March fell to just 17.5%, while the odds for such a cut in May fell to 62%. 

The SPDR

Gold holdings at the SPDR Gold Trust rose 1.44 tonnes yesterday to a total of 843.66 tonnes, away from August 2019 lows at 842.22 tonnes. 

US stock indices declined today after both Dow Jones and S&P 500 notched up record highs on Wednesday.

Wall Street extended gains this week after positive corporate quarterly results from various US companies for the last quarter of 2023. 

US stocks were boosted as well by forecasts the Fed will eventually start cutting rates this year.

Earlier US data showed initial unemployment claims fell to 218 thousand last week, while analysts expected 221 thousand.

On trading, Dow Jones fell 0.3%, or 100 points as of 17:06 GMT to 38,577, while S&P 500 fell 0.1%, or 5 points to 4,990, as NASDAQ rose 0.2%, or 31 points to 15,788.